September 22, 2015 (Source: Marketwired) — Cancana Resources Corp. (TSX VENTURE:CNY) (“Cancana” or the “Company”) with its joint venture partner Ferrometals provided an update on Phase One exploration at their Brazil Manganese Corp. (“BMC”) project in Rondônia, Brazil. The Company has received final aerial geophysics survey data and initial assays from drilling. The results are positive and confirm the Company’s operating geological model that supports the existence of significant, high-tenor mineralization at depth similar to the surface boulders currently being processed.

Current analysis highlights 62 manganese target areas along these structures based on enhanced conductive response.

Phase One Drilling

38 drill holes were completed for 2,084 meters, with results from the first two of eight targets received to date.

Phase One drilling confirmed the Company’s geological model that the manganese mineralization persists at depth in structurally-controlled, hydrothermal veins at the same tenor to that seen at surface.

The mineralized veins are confirmed to be the source of surface colluvium.

Manganese oxide phases persist below the base of weathering to a vertical depth of at least 70 meters.

Structures intersected in position predicted by geophysical models.

Massive mineralization returns grades similar to surficial material:

DDH_J3_001: 3.1m @ 48.9% Mn, incl. 1.9m @ 57.8% Mn from 32.2m

Phase Two exploration drilling has commenced.

Anthony Julien, Cancana’s President and CEO, stated, “These early-stage results exceeded our expectations. We expected to find evidence of high-tenor mineralization at depth similar to surface mineralization, but the identification of an abundance of additional targets and more than 200 km of additional fault systems is welcome indeed. Our shareholders can be pleased by these initial results, as we will be expanding drilling activity with the objective of delineating an initial resource in 2016.”

Background

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The BMC project area is being tested for a different style of manganese mineralization to the “sedimentary” deposits for which Brazil is generally known.

Sedimentary deposits have mixed oxide and carbonate ore types. Carbonate ores are lower grade, but can weather to form shallow enriched oxide caps. Ores are used extensively in the steel industry. Blending is sometimes required to manage impurities (phosphorous, iron and silica).

The BMC project area was targeted in the belief that high-grade manganese colluvium in the district was sourced from underlying hydrothermal veins, representing a different deposit style. Such ores have lower phosphorous and iron contents, giving rise to niche applications in the steel, fertilizer, and battery industries. Examples of this deposit type include Woodie Woodie (Australia), and various deposits of Mexico (e.g. Talamantes and Lucifer Districts).

Key objectives of the exploration program to date have been:

To identify the position of prospective structures through geophysics.

To demonstrate that manganese oxides persist in vein structures at depth.

CGG / LASA Prospecções S.A. undertook a 7,300 line kilometer HELITEM™ survey from April to June, 2015. Over 61% of the BMC Project’s 104,000ha land package was flown on 100 meter line-spacings using MULTIPULSE™ technology to maximise resolution of near-surface conductors. CGG has delivered the levelled data, which is being assessed by geophysical consultancy, Core Geophysics. Initial modelling has outlined 62 target areas for follow-up field assessment.

The survey has greatly improved the understanding of the basement structure. Known manganese occurrences show a clear association with gradients in electromagnetic and magnetic data, which are interpreted to mark associated fault systems and extend for 211 strike kilometers within the project area. Additional trends are under evaluation where similar geophysical responses are present, but the presence of manganese remains to be confirmed.

Within the structural corridors, the 62 target areas that have been defined range from relatively discrete anomalies across a few adjacent flight lines, to broader corridors where zones of elevated conductivity can be traced for approximately 300 to 1,500 meters.

The alignment of the target corridors with areas where manganese has been intersected in the Phase One drilling program provides confidence in the value of the geophysical program.

Core Geophysics is now undertaking more detailed modelling of the geophysical data, including conductivity depth inversions to better constrain the responses in three dimensions. Field evaluation of the structural corridors and associated targets will be progressively undertaken over the remainder of 2015 and into 2016. New areas will be added for reconnaissance drilling as occurrences of manganese are confirmed within the target zones.

Note that targets defined by geophysical anomalies are preliminary in nature and not conclusive evidence of the likelihood of the occurrence of a mineral deposit.

The Phase One drilling program has recently been completed, with thirty-eight HQ diamond drill holes cored for 2,084 meters over eight prospects.

Areas selected for drilling were based on field evaluation of a number of sites where trenching and limited surface exposure provided some support for the structural model, including indications of veining and brecciation textures.

Particular objectives of the drill program have been to confirm that manganese mineralization persists in structurally-controlled vein zones at depth in the basement granites, and to confirm whether primary manganese oxide mineral phases extend beneath the base of weathering. This would confirm the exploration model and provide support for the beneficiation of quality product, irrespective of the depth of surface oxidation.

Manganese mineralization has been encountered to varying levels in all prospects tested. The level of drilling has varied from each site, with two to ten holes drilled. To date, assay results have been returned from the first series of holes drilled at the Jaburi and Lucas prospects, with other results pending (Appendix 1).

The highest-grade intersection to date has been returned from the Jaburi Prospect, where hole DDH_J3_001 returned 3.1m @ 48.9%Mn, including 1.9m @ 57.8% Mn. One sample in the high-grade interval was reported at the maximum detection limit of SGS laboratory: 58%Mn. The more massive zone sits within a broader breccia / stringer package (photo below).

The grade of intersections returned to date varies directly in proportion to the level of included silicate breccia present. Breccia ores are a common component of hydrothermal ore systems, developing when the rock mass splinters under hydrostatic pressure.

Importantly, while the breccia influences the grade of an intersection, the underlying “tenor” of the mineralization does not change (tenor being the percentage of manganese contained within the ore mineral). Conventional processing technologies are successfully applied in other hydrothermal manganese ores. BMC has initiated a metallurgical test program to confirm potential recoveries through crushing and heavy liquid density separation, or jigging. Results will be summarized when available.

The style of mineralization encountered in the various prospects tested varies from relatively discrete vein zones in massive granite, to veins associated with broader manganese stockwork zones. Results will be presented in detail as further assays become available.

Tin Evaluation

The Company has conducted preliminary lithogeochemical studies on thirty-four granitoid samples to identify the intrusion that may be associated with a number of alluvial tin (cassiterite) occurrences historically worked in the area.

The sampling indicates that the different granitoid phases have variable silica content (64.1 – 76.9%SiO2), and appear to lie along a fractionation trend. The known cassiterite occurrences flank the highest silica phase, which has an elevated background tin content (up to 34ppm Sn), and exhibits variation in geochemical ratios that have traditionally been used to distinguish potentially prospective bodies (Rb/Sr, Mg/Li, K/Rb, Ba/Rb).

The historical CPRM radiometric data in conjunction with the new high-resolution magnetic data has highlighted corridors for further evaluation.

Next Steps

The second phase of the drilling campaign has commenced. A 2,000 meter extension to the current contract with Geotechreserves do Brasil has been signed. A new portable drill rig is being sourced through drilling contractor, Energold to provide access in steeper terrain. The second rig is expected to arrive on site in the coming weeks.

The objective of this second phase is to test strike extensions to the anomalous target corridors. Where wider zones of manganese mineralization are encountered, drilling will be conducted on 200 to 400 meter spacings to broadly characterise the scale of the mineral systems. Areas of better width and continuity will be progressively infilled along strike at 100 meter spacings. The ultimate objective will be to work towards developing an inferred resource in 2016. Further details on Phase Two drilling can be expected in the coming weeks.

Ongoing rock chip and stream sediment sampling will be conducted to clarify the tin exploration opportunity as a secondary priority.

The technical information about the Company’s exploration activities has been prepared under the supervision of and verified by Dr. Adrian McArthur (B.Sc. Hons, PhD. FAusIMM), a consultant to Brazil Manganese Corporation, who is a “qualified person” within the meaning of National Instrument 43-101.

ABOUT CANCANA

Cancana Resources Corp is focused on exploring and developing the BMC manganese project in Brazil with its joint venture partner Ferrometals, a special purpose investment vehicle for The Sentient Group. Sentient is a resource-focused private equity fund with approximately $2.7Bn in assets under management, and a 15-year track record for advancing resource projects from early stage to pre-feasibility and development. Cancana and Ferrometals are employing a two-pronged strategy at BMC. The primary objective is to advance BMC to an initial resource and onward to pre-feasibility, while also expanding current small-scale production to support those exploration activities. Further information can be found on the Company’s website: www.cancanacorp.com.

FORWARD-LOOKING STATEMENTS

Some statements in this news release contain forward-looking information or forward-looking statements for the purposes of applicable securities laws. These statements include, among others, statements with respect to the Company’s plans for exploration and development of the Brazil properties and potential mineralization. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such risk factors include, among others, failure to obtain regulatory approvals, failure to complete anticipated transactions, the timing and success of future exploration and development activities, exploration and development risks, title matters, inability to obtain any required third party consents, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices and one-time events. In making the forward-looking statements, the Company has applied several material assumptions including, but not limited to, the assumptions that: (1) the proposed exploration and development of mineral projects will proceed as planned; (2) market fundamentals will result in sustained metals and minerals prices and (3) any additional financing needed will be available on reasonable terms. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.

Notes

HQ-diameter drill core has been obtained from surface to end-of hole using a track-mounted Boartlongyear LF90D drill rig operated by drilling contractor Geotechreserves do Brasil.

Collar positions are recorded by hand-held GPS (accuracy typically +/- 5m). The reported grid system is South America 1969, Zone 20S. Collar positions are marked with a cement plug for later survey pick up for any areas that progress to resource drilling. Down hole-deviation is measured by a Reflex Gyro survey tool.

The quality of recovery has been good to excellent. Recovery is recorded against individual core runs whilst drilling, and any areas of core loss that can be specifically identified are recorded. Holes undergo geological and basic geotechnical logging, and are photographed prior to sampling. Samples are collected as half-HQ core where the core is competent. When occasionally broken, half the sample is hand-picked in the most representative way possible. Sampling is conducted to geological boundaries.

Manganese samples are submitted to an accredited SGS Laboratory in Belo Horizonte, Brazil. Samples are dried, crushed to 3 mm, homogenised, then a split is pulverised to produce a pulp of 250 – 300 g with 95% passing 150 mesh. Submissions include certified references to monitor laboratory performance, which have returned results within the expected laboratory analytical error margins. Laboratory protocols include blanks, duplicates and repeats. Major oxides in mineralized zones are analysed by lithium-borate fusion – XRF techniques, with minor elements monitored via a multi-acid digest and ICP-OES analysis. Zones of wall rock alteration with trace mineralization are monitored analysed by multi-acid digest and ICP-OES analysis.

Until dispatch, samples are stored in the company’s supervised stockpile yard or exploration office. The samples are couriered to the assay laboratory using a commercial contractor (Eucatur). Samples are weighed prior to dispatch and material received by the laboratory is reconciled with dispatch records. Pulps and rejects are returned to the Company. A subset is selected for periodic round-robin testwork.

Surface granite samples have been submitted to ALS Global in Belo Horizonte, Brazil, for sample preparation and have been onforwarded for lithogeochemiical analysis through their “Complete Characterisation” Package at their laboratory in Lima, Peru.